Considering a property move but worried about funding? Equity release could be the key to unlocking your next home purchase. This financial solution allows homeowners aged 55 and over to access the wealth tied up in their current property, providing the funds needed for a new home without the stress of traditional mortgage applications.
If you’re looking to downsize, upgrade, or relocate entirely, equity release offers a flexible approach to financing your move. Let’s explore how this proven financial tool can help you secure your ideal property.
How Equity Release Works for Home Purchases
Equity release allows you to convert part of your home’s value into tax-free cash whilst retaining ownership. For home buyers, this creates several opportunities:
Direct Purchase Funding: Use the released equity as a substantial deposit or even purchase a new property outright, depending on the amount available and your new home’s value.
Bridge Financing: Release equity from your current home to secure your new property before completing the sale of your existing one, eliminating the pressure of timing both transactions perfectly.
Upgrade Opportunities: Access additional funds to purchase a more expensive property than your current home’s sale price would typically allow.
Around 70,000 people across the UK use equity release annually, with many choosing this route to facilitate their property moves without the complications of traditional lending criteria.
Key Benefits for Home Buyers
No Monthly Repayments: Unlike traditional mortgages, most equity release plans don’t require monthly payments, making budgeting simpler and reducing ongoing financial pressure.
Age-Friendly Criteria: Traditional mortgage providers often impose age restrictions, but equity release is specifically designed for over-55s, with no upper age limit concerns.
Flexible Use of Funds: The money released can cover not just the property purchase but also associated costs like legal fees, removals, and immediate home improvements.
Guaranteed Ownership: With lifetime mortgages—the most popular equity release option—you maintain full ownership of both your current and new properties.
Essential Eligibility Requirements
To use equity release for buying a new home, you’ll need to meet standard eligibility criteria:
- Be aged 55 or over
- Own a UK property worth at least £70,000
- Have minimal outstanding mortgage debt
The amount you can release typically ranges from 20% to 60% of your property’s value, depending on your age and the property’s condition. Older applicants generally qualify for higher release percentages.
Planning Your Property Purchase Strategy
Property Valuation: Start with a professional valuation of your current home to understand how much equity you could potentially release.
Budget Calculation: Factor in all costs including legal fees, estate agent charges, removals, and any immediate renovations your new home might need.
Timing Considerations: Work with your equity release advisor to coordinate the release with your property purchase timeline, ensuring funds are available when needed.
Professional Guidance: Engage FCA-regulated advisors who can assess multiple providers and find the most suitable plan for your specific property purchase goals.
Important Considerations
Equity release is a significant financial decision that affects your estate’s value and your family’s inheritance. The loan amount plus accumulated interest will be repaid when your property is eventually sold.
Consider alternative options like downsizing without equity release or exploring later-life mortgages before committing. Independent financial advice ensures you understand all implications and choose the most appropriate solution for your circumstances.
Take the Next Step Towards Your New Home
Equity release has helped thousands of UK homeowners secure their ideal properties without the stress of traditional mortgage applications. With proper planning and expert guidance, you could soon be holding the keys to your dream home.
Ready to explore how equity release could fund your next property purchase? Connect with FCA-regulated equity release advisors who can provide personalised quotes and guide you through every step of the process. Your new home awaits—let equity release help you get there.
